Record number of new firms join DIFC in 2019 as it pursues 2024 growth targets

Total number of firms in the emirate's financial hub climbed 14 per cent year-on-year

Gate Avenue is DIFC's newest development - Dubai's financial hub has seen registration of a record number of new firms last year. Ashleigh Stewart / The National

The Dubai International Financial Centre is on track to triple in size by 2024 after attracting a record number of new firms to the emirate's financial free zone last year, pushing the size of the DIFC as a marketplace to more than $700 billion (Dh2.5 trillion), its governor said.

The number of firms operating out of the DIFC rose to 2,437 by the end of 2019 after the centre welcomed 493 new companies, Essa Kazim told a media briefing on Sunday. The centre is home to 737 active financial firms from across the globe, an 18 per cent rise from 2018 and a 64 per cent jump in the last five years, he noted.

“We have passed six years into our [10-year] strategy. All our KPIs [key performance indicators] are on track and some of them are even exceeding … what has been set [as target] in 2014,” Mr Kazim said, adding that the number of companies has doubled in the last six years from its 2014 level.

The total size of the wealth and asset management industry in DIFC grew to $422bn, while other activities amounted to $276bn. Gross written premiums by DIFC-based insurers totalled $1.98bn, Mr Kazim noted.

“We have managed to create a marketplace which is roughly $700bn. That is really what we meant by ‘deepening the core’ … the companies licensed here doing more activities,” he said.

DIFC’s revenue at the end of 2019 rose 2 per cent year-on-year to $228 million, while its net profit at $119m remained stable with 2018 levels, he said.

The onshore financial centre is home to some of the world’s biggest financial institutions, banks, investment firms, wealth managers and insurers. AntFinancial’s payment firm WorldFirst, Malaysia’s Maybank, US financial services firm Cantor Fitzgerald and Mauritius Commercial Bank were among the companies that set up shop in Dubai’s financial hub in 2019.

DIFC was established in 2004 and aims to raise the number of financial companies to 1,000, employing 50,000 people, by 2024. Some 25,638 people were working in the centre at the end of last year, a 9 per cent jump from 2018.

The centre has so far not seen any impact due to the spread of the coronavirus on its business. It has registered 100 companies in the first two months of the year, which translates to about 2.5 new registrations each working day. That pace is faster than the rate seen in 2019, Mr Kazim noted.

Despite the rapid spread of the infection around the world, which has severely hampered global travel, Mr Kazim said financial companies will find their own ways and means to provide services to clients.

“Life has to go on. Whether it is the DIFC, or the city of London, or any other place.”

So far, individual firms have decided whether employees should work from home or not. The DIFC Authority, he said, has its own plans in place to work remotely if the situation calls for it.

“My understanding is that it has been under control so far,” he said, adding that DIFC will take the necessary steps if and when required.

The centre, whose investment in properties last year grew 12 per cent to $3.4bn, remains committed to its DIFC 2.0 expansion plan, an extension that will triple its current space. The project, however, is demand-driven and will be built in phases, he noted.

“We are not going to build and wait for it to be occupied,” Mr Kazim said.

“The whole framework of building and construction will depend on the relationship with tenants,” he said adding a number of companies have already expressed interest in having their own premises.